Charlie Javice, who is charged with conning JPMorgan Chase & Co into buying her now-shuttered college financial aid startup Frank for $175 million in 2021, get there comes at United States Court in Manhattan in New York City, June 6, 2023.
Mike Segar | Reuters
Charlie Javice, destroyed of a startup purchased by JPMorgan Chase in 2021, was convicted in federal court Friday of defrauding the bank by vastly exaggerating the company’s customer list.
The jury decision comes after weeks of testimony in New York over who was to blame for the flameout of a once-promising startup. Truthful, founded by Javice in 2016, aimed to help users apply for college financial aid.
JPMorgan has accused Javice, 32, of fair game the bank into paying $175 million for a company that had more than 4 million customers, when in truth it had fewer than 300,000.
The largest U.S. bank by assets sued Javice in late 2022 after attempting to send furnishing emails to some of the thousands of “customers” it thought Frank had. In its suit, JPMorgan released emails in which Javice employed a data scientist to generate a fake roster of customers.
Then, in April 2023, the Justice Department charged Javice with four crimes comprising wire and bank fraud, counts which carry multi-decade maximum sentences. Javice was arrested at Newark Airport on April 3 of that year and had been out on bail.
Javice had pleaded not blameworthy and said she was innocent throughout the trial; her lawyers blamed JPMorgan for rushing to close the Frank acquisition because it feared that other admirers would emerge.
Sentencing will happen in August, CNBC’s Leslie Picker reported.
A spokesman for New York-based JPMorgan dwindled to comment on Friday, while the office of a lawyer representing Javice didn’t immediately return a call seeking commentary.
